House prices will rise 2 per cent next year as confidence returns to the market, economists predict.
Howard Archer, chief UK economist at accounting giant EY, said the Tories thumping win would boost house price growth from its current level of about 1 per cent a year. He said record low interest rates would also help homebuyers although experts now think there is less chance of a rate cut by the Bank of England. Policymakers are tipped to keep interest rates on hold as they wait to see the impact of Boris Johnson's hefty majority. Economists think two policymakers - Michael Saunders and Jonathan Haskel - could still vote to cut rates.
Ruth Gregory, economist at Capital Economics, said it was likely that rates would remain unchanged in 2020 before rising to 1 per cent in May 2021. She said GDP could increase to 1.8 per cent in 2021 as spending plans fuel economic growth.
Archer said: 'Housing market activity could be given a modest lift in 2020 if the Government introduces specific measures aimed at boosted the sector in the Budget. Low mortgage interest rates and a shortage of properties for sale should provide some support to prices.'
By Helen Cahill